Question

The finance team of an organization has prepared an end of quarter balance sheet. The stockholders equity amount is a negative value. What must be true in this situation?
A. The organization is losing money each period.
B. The organization’s expenses are greater than its assets.
C. The organization has no assets of value.
D. The organizations liabilities are greater than its assets

Answer 1

The finance team of an organization has prepared an end of quarter balance sheet. The stockholders equity amount is a negative value. What must be true in this situation? D. The organizations liabilities are greater than the assets. Stockholders equity is also known to many as shareholders equity. This is listed on the companies balance sheet and includes the total assets and the total liabilities subtracted then equals stockholder's equity. Since you subtract the liabilties from the assets, if there is a negative value then the liabilities are greater than the assets.

Answer 2

Answer:

The organizations liabilities are greater than its assets

Explanation:

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